|Written by Wolfe|
|Wednesday, 08 October 2008|
In these economic times, with the state of the stock market playing like a yo-yo, my thoughts have turned to how this will effect me. I’ve already done one post on ‘my cost of living’, but with the changes happening so fast in the markets, it no longer applies as it did before, and during any kind of crisis, like the recent rice and chicken ones, doesn’t give someone an idea of how things in the economy effect them. The most relevant factor in all this that will effect me is the price of real estate, which in my case works in my favor. What has caught my interest however recently is the underground economy, how is the current state of affairs effecting those that don’t play by the rules, and so on. <!–more–>
I came across a Wikipedia article on “Household Electricity Approach” to determine the size of the underground economy. This reminded me also of the Carbon Footprint, and other such indexes which people use to see how they compare to others in a given context. Hence, I decided that what survivalists, and those into self-efficiency needed was an index relative to themselves. In trying to figure out what factors would be involved in a self-efficiency index, a few came to mind right away. First off, electricity, gas, water consumption, and food.
These should be fairly easy to figure out as we all get Hydro bills, Gas bills, and what not. If, in the case of electricity you do not produce any of your own, you are 100% less efficient then those that produce a 100% of those that provide all their electric energy needs. It isn’t a measure of how much you use, if you use none, your 100% efficient in that area.
Just for the record, if you planning on using a kerosene lantern, and don’t make the kerosene yourself, in a SHTF situation your not being very efficient. One other factor that occurred to me I couldn’t really place a proper label on, it concerns the amount of money you need compared to how you get it.
Considering that there is property tax, and for renters rent, it is an unavoidable expense, and takes a percentage of your income to cover it. But, the amount of money you take in can vary from person to person, and differs in style, and can change in circumstances.
Here is what I’m thinking, if I work for a fast food restaurant, I am at the whim of the market, and my employer completely. If I work in a service trade as a contractor, I am at the whim of several clients, which is a little better then working in a restaurant, because a service contractor is also a producer of real products and I’m not likely to loose all my clients at the same time.
If I hold down a small business that produces products from raw materials (assuming that those raw materials are locally available), I’m in a better position to be self-efficient then others. Potters, are a prime example here, my trade of choice, as are glass blowers, and similar early trades. Part of the difference here is that I would have customers rather than bosses. Not only does that give me more control over my own fate, but also give me more ability to adept to changing markets.
So there are two other factors involved in creating a self-efficiency index, a value on the type of income, the income itself, and what percentage of that income is taken by items you cannot avoid such as property tax.
The food factor itself should be fairly easy to figure out as far as costs go, since all you would have to do is figure out how much it would have cost you for food items you produced yourself. But since this isn’t really about money, it’s about efficiency, and therefore it is the amount of food you produce yourself, compared to that which you need to buy or trade for that would be a factor in this index.
I would think that using a healthy food guide as base factor, or a calorie index would provide something to compare too. Other things that I’m thinking about to use in this get more vague since I’m not sure how to measure things that are arbitrary to each person. Such things mostly include consumer goods, toilet paper comes to mind first, so do shoes and boots, and other such items that require not only knowledge to produce yourself, but also require time to produce which can be almost as important if not more so depending on what it is.
My thinking is this, do you really want to spend hours making shoes when the time spent would be better milking a cow? And if you continue on that train of thought, you might come to the conclusion that the job offer over at the fast food restaurant is more self-efficient then growing your own food.
Where does one draw the line?
Fortunately for me it is easy to figure out how to decide where to draw line, I simply refuse to do so. In my opinion it is more important to be able to make your own shoes, then to actually doing so. What becomes more self-efficient depends on circumstances at the time the item is needed. I will assume that anyone who needs an index like this already knows that they are not were they want to be at being self-efficiency, so any extra cash you have should be used to that end, and I’ll ignore this amount and figures until I’m closer myself.
So in a SHTF situation, you might make or trade items to acquire what you need, but in a ‘normal’ economy you’d buy them from the local thrift store. So how does that translate to an index factor?
I think one would have to compare yourself to the sheeple that goto Walmart, and other such places, and look at how efficient it is to make a product yourself under any settings, keeping in mind that you can also buy (used or new) or trade for what you need. Which of coarse still leaves me without some sort of number to place in a mathematical formula. Therefore I would eliminate anything you can survive without, food, basic clothing, shelter, clean water, heat, are about all that I would include as far as consumer goods are concerned. You can survive without toilet paper, albeit not so nicely, and the same with most other goods. This leaves me with the following:
<li>A factor of Utilities, such as Gas, Electricity, and Water. I compared these to the population average for my area. I do not produce my own electricity, water, or gas, so this will be a good marker to compare at a later date on the farm. Currently, we use an average of 1100 kW.h, of electricity per month, we use an average of 0.04 GJ of Natural Gas per hour per day, 1.2 per month. We get our tap water for free in this area of British Columbia so I’ll use the average from stats Canada. I assume these figures are not to bad for a family of six with the old wiring, and an old house but I have no idea.</li>
<li>A factor for shelter costs. We don’t own yet, but rent, I know that property tax is somewhere around 1% for suburban houses of the estimated value of the land. This home is valued currently at about $450,000 so therefore the property taxes are about $4,500 a year. My rent is $850 a month, if I multiple it by twelve it is just over double the property tax so this gives me a good factor when dealing with rent since I believe that owning is worth double points over renting, then divide by the cost of a silver troy bar. (see below)</li>
<li>Total true income is another factor. This one is tricky. When I was caravaning on the road for 14 years, we made on average half of what we make now, but were by no means better off getting off the road. Plus, I live in a socialist country (Canada) so I don’t really pay for health care costs directly like my US counterparts. But if SHTF happens, I’ll have to supply any needs for health care myself directly. I also know, being of duel citizenship, that in Europe there are options for health coverage that vary greatly compared to North America. So the problem is compounded when trying to use some kind of scale to compare how self-efficient you are in regards to fiat money.There use to be a really good marker for the value of a dollar, the gold base system, but I’m not going to use it mainly because the figures hurt my brain and don’t want to recalculate so often, so I’m going to use silver instead.Currently, as of today (in this market it’s not going to count for much) silver is trading about $13.20 a troy ounce. (Canadian folks) Silver is a good marker because you know that the buying power of silver will remain relatively the same compared to goods and services, fiat money on the other hand will not SHTF. So if $13.20 will get me approximately 10 loaves of bread today, one silver troy bar will still get me that even if the cost of bread goes threw the roof. Maybe something else would have been a better example, I’m not in the bread basket of North America. So my true income marker would be the amount of silver troy bar I could buy. If the buying power of the dollar goes down, so does the marker. Now I also have to figure out how much my health care costs are and include that into my income before I figure out how many troy bars I could get, but for those in the states that know their true costs, it should be easier for you.Now about how you get those troy bars. I would say that the person who has their own small business that relies on local raw resources would be the most efficient, and the one that works at a local restaurant like McBarfs would be the least in comparison. I also included service trades above, but it also occurred to me that pensioners, and those living in nursing homes would even less then them, as far as income goes in this index. I think the factor should be divided by as you move away from being self-efficient therefore a small self-efficient business would factor the amount of troy bars they can buy with their income by one, and the the service trade guy divides by two, and the restaurant worker by three, and all the rest by four.</li>
<li>Food factor. This one is easy, a lot of survivalists spend time on figuring out what plants they are going to grow, how much they should have in MREs and so on, but to be self-efficient all you have to do is figure out your base, either the cost, the actual food in a regular grocery list, some kind of food guide such as Canada’s food guide, or just the calories, vitamins and minerals you need to survive.I’m opting for the actual cost, it’s easy for me to keep track of currently, and is a real time factor. I will convert it over to the silver troy bar standard to make it compatible with other above however, and subtract from it any food I produce myself, another easy factor since that is currently near zero.</li>
<li>Consumer Goods, or better knowns as What You don’t make yourself factor: I know, lame name, but it fits. This is another silver troy based system factor, basically all the money you spend on stuff that you don’t produce yourself. This wouldn’t include things you need to survive however. I think the most important thing about this is not only does it make you look at your budget, and the money you spend, but how much of your spending is not sustainable.My formula for all this works out like so (my example):
Take your total income including your health costs: $27,000 per year Divide that amount by the current rate for a silver troy bar: 27,000/13.2=2045.45 Now divide that by what kind of income you have as mentioned above, mine is currently the worse, so this is good thing to compare to the farm in a few months. I divid by 1, but I should divide by four, it just know my source of income is going to chang soon, and the amount is not going to change to much.Added Note: dividing by 2,3,4 etc doesn’t seem to work, I think this should be changed to something like 1.1, 1.4, 1.7, etc depending on what type of business you work for in more detail. Just remember that a score of 1 is WTSHTF secure, and what ever number you can alot to beyond that is less secure. Add up how much energy/water you use in your household, and figure out what percentage you are compared to the average for your area, then average it out between them. Electricity: 13200:11300 kW.h per year Water: 136274:136274 litres per year (OUCH!) Gas: 14.4:13.68 GG per year.The first part of each ratio above is my family average, the second part is the national average. A little note first, I have a family of six, the averages used were based on a family of four so my Water usage is likely higher then above, plus I have a garden, not everyone does.The percentages work out like this: Electricity: 115.79% Water: 100% Gas: 105.26% Average: 107.01% So far I have three factors figured out. I have a base for currency exchange and income worked out to 2045.45, a score of 772.72 for shelter (850×12/13.20), and an energy/water factor of 107.01%, not doing so good am I? I have to guess at what my rate is for a food factor because I don’t keep good records about what we get ourselves.We generally get blueberries from a old military base in Richmond, BC. Cranberries in Pitt Meadows (don’t ask), and fish. I haven’t gone hunting this year, so meat was bought 100% at the local grocery store. Our garden provide very little this year, mainly because I’m on a quest to harden seeds, so I’m not interested in getting food out of it. If we provided 10% of all our food, my score would be 90%. but since I have to more of a pessimist about my current situation I’ll say that my score is 99.99% for the year. That leaves me with only one last factor to figure out. How much do I spend of silver troy bars on junk?
There is 2045.45 bars available in my household per year, out of that I spend 772.72 on shelter leaving 1272.73. My costs for food, which are an essential to staying alive, are about equal to my shelter costs, so that’s another 772.72 gone, which leaves me with 500.01. At the end of every month I can buy four silver troy bars (now you know why I used this as a base system), which means I’m spending 447.21 on garbage, or at least on stuff I can not/to lazy to make myself.
The difference between what I have left over and what I started with becomes my final factor. (447.21:500.01=89.44%) Now to pull it all together, to get something to gauge against in the future.
1: Energy/Water: 107.01
2: Shelter: 772.72
3: True Extra Income: 500.01
4: Food: 99.9
5: WIDMMS: 89.44 (What I Don’t Make My Self)</li>
I think all the percentage based scores should be multipliers, the reason for this is they each represent a bad mojo. So if you score a low percentage on the amount of junk you buy, you will not score to much higher because the multiplier will be lower and so on.
This means I have a multiplier of 296.35 (107.01+99.9+89.44) Since everyone true income will be different, it’s the amount of that income you use to survive that counts, therefore I use the amount that is extra beyond shelter and food, and add it to the shelter score since some people rent at different rates, or pay property taxes at different rates. (1272.73) This leaves me with two factors, one based on percentages and another on shelter/income, I just multiplied them to make it more simple. (1272.73×296.35=377173.5355) That’s a huge number that after all these calculations doesn’t really mean anything.
We know that a person who doesn’t have to pay property taxes, and covers 100% of everything he/she needs, including health care from their own homestead gets a perfect score (maybe their spouse is a doctor). And we also know that a person living off of welfare in a nursing home gets the exact opposite score, the question is where do we fit into this?
Well I happen to know what the score is for someone in a nursing home around the corner from my house, and it makes a perfect example of a bad score because not only do the they live off welfare, their ‘home’ in question has no idea about shopping locally, or being green etc. It happened to work out to being so close to 500,000 I just rounded it off. If 500,000 is the worse case (0% Self-Efficiency) then zero is perfect. That means that I am only about 24.57% self-efficient. (377173.53:500000=75.43%) Not good.